Buffett Ends Bullish Municipal-Bond Bet

by Alyssa Oursler | August 21, 2012 12:50 pm

For all those investors out there eagerly watching Warren Buffett’s every move, here’s the latest update: the billionaire’s baby Berkshire Hathaway (NYSE:BRK.A[1], BRK.B[2]) has ended its bet on the municipal-bond market[3] five years early.

It is not yet clear whether the termination of the wager on credit-default swaps insuring $8.25 billion of municipal debt tallied the company a loss or profit.

One thing is clear, though: News of Berkshire’s no-longer-bullish outlook on the bonds is increasing speculation that there is too much risk in buying debt issued by cities, states and other public entities.

The move could be a warning to the many investors that have been flooding into municipal debt of late, keeping bond prices high and yields low.

Buffett declined to comment on the move, according to The Wall Street Journal.

More on Buffett:

  1. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  2. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  3. ended its bet on the municipal-bond market: http://online.wsj.com/article/SB10000872396390443855804577601413630604118.html
  4. What Does Buffett See in NOV, PSX?: https://investorplace.com/2012/08/what-does-buffett-see-in-nov-psx/
  5. The Ultimate Reality Show: Team Buffett vs. Team Icahn: https://investorplace.com/2012/08/berkshire-and-icahn-end-game-tv-series-brk-a-brk-b-c-jpm-intc-jnj-pg/
  6. Investors Don’t Always Have to Follow Buffett’s Moves: https://investorplace.com/2012/08/is-buffett-wrong-again-brk-b-ac-jnj-pg-kft-ibm-nov/
  7. Berkshire Earnings: Buffett Winners & Losers: https://investorplace.com/2012/08/berkshire-earnings-buffett-winners-losers/
  8. Buffett Still Can’t Find a Big Buyout Bargain: https://investorplace.com/2012/08/buffett-still-cant-find-a-big-buyout-bargain/

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